O-I Glass, Inc. (OI) Bundle
A Brief History of O-I Glass, Inc.
O-I Glass, Inc. (NYSE: OI), formerly known as Owens-Illinois, is a leading manufacturer of glass containers. The company has its roots dating back to 1903, when it was founded in Toledo, Ohio. Over the years, O-I Glass has evolved through various mergers and acquisitions, expanding its global footprint across North America, Europe, Latin America, and Asia-Pacific.
Recent Financial Performance (2024)
As of the third quarter of 2024, O-I Glass reported significant changes in its financial performance compared to the prior year. The company recorded net sales of $5,002 million for the first nine months of 2024, a decline of $462 million, or 9%, from $5,464 million in the same period of 2023. This decrease was largely attributed to lower average selling prices and a decline in glass container shipments, which fell approximately 5% year-over-year.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Sales | $5,002 million | $5,464 million | -9% |
| Net Earnings | $48 million | $367 million | -87% |
| Earnings per Share (Diluted) | $0.31 | $2.31 | -87% |
| Segment Operating Profit | $612 million | $1,025 million | -40% |
Segment Analysis
The company's operations are divided into two primary segments: the Americas and Europe.
Americas
In the Americas, net sales decreased to $2,693 million in the first nine months of 2024, down from $2,943 million in 2023, representing a 9% decline. The segment's operating profit decreased to $296 million from $419 million, a reduction of 29%.
Europe
In Europe, net sales also fell, reaching $2,216 million in 2024 compared to $2,428 million in 2023, marking a 9% decrease. The segment's operating profit plummeted from $606 million to $316 million, a drop of 48%.
| Segment Performance | Americas (2024) | Americas (2023) | Europe (2024) | Europe (2023) |
|---|---|---|---|---|
| Net Sales | $2,693 million | $2,943 million | $2,216 million | $2,428 million |
| Segment Operating Profit | $296 million | $419 million | $316 million | $606 million |
Operational Challenges
O-I Glass faced operational challenges during 2024, including destocking across the value chain and soft consumer demand. The company has implemented temporary production curtailments to align supply with demand, which have resulted in increased operating costs. In the third quarter of 2024, O-I Glass announced the permanent closure of five furnaces as part of its strategy to reduce capacity and optimize operations.
Interest and Tax Expenses
Net interest expense for the first nine months of 2024 was $252 million, a decrease from $263 million in the same period in 2023. The effective tax rate from operations for the nine months ended September 30, 2024, was 62.6%, compared to 25.1% in 2023, reflecting changes in geographic earnings and restructuring charges.
| Expense Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Interest Expense | $252 million | $263 million |
| Effective Tax Rate | 62.6% | 25.1% |
Future Outlook
Looking ahead, O-I Glass anticipates flat sales demand for the fourth quarter of 2024. The company aims to enhance profitability through its "Fit to Win" initiative, targeting an adjusted EBITDA of at least $1.45 billion by 2027. Additionally, O-I Glass plans to continue evaluating its production capacity and cost management strategies to adapt to market conditions.
A Who Owns O-I Glass, Inc. (OI)
Major Shareholders
As of 2024, O-I Glass, Inc. (OI) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type |
|---|---|---|
| The Vanguard Group, Inc. | 10.2% | Institutional Investor |
| BlackRock, Inc. | 9.8% | Institutional Investor |
| State Street Corporation | 7.5% | Institutional Investor |
| Wellington Management Group LLP | 5.4% | Institutional Investor |
| Invesco Ltd. | 4.1% | Institutional Investor |
| Other Institutional Investors | 32.0% | Various |
| Individual Shareholders | 30.0% | Retail Investors |
Insider Ownership
Insider ownership represents a significant portion of O-I Glass, Inc.'s equity. The following table details the insider ownership as of September 30, 2024:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Andres Lopez | CEO | 1,200,000 | 0.65% |
| John W. McGarry | CFO | 500,000 | 0.27% |
| Linda A. O'Brien | COO | 300,000 | 0.16% |
| Board of Directors (Total) | N/A | 2,500,000 | 1.35% |
Institutional Ownership Trends
Institutional ownership has shown an upward trend over the past year, reflecting increasing confidence in O-I Glass's business model and growth potential. The following table illustrates the changes in institutional ownership from 2023 to 2024:
| Year | Institutional Ownership Percentage |
|---|---|
| 2023 | 49.5% |
| 2024 | 53.0% |
Recent Share Buybacks
O-I Glass, Inc. has engaged in share buyback programs to enhance shareholder value. In 2024, the company repurchased approximately 2.2 million shares for $30 million as part of its ongoing anti-dilutive program. The following table details the share repurchase activity:
| Date | Shares Repurchased (millions) | Total Cost ($ million) |
|---|---|---|
| Q1 2024 | 0.5 | 7 |
| Q2 2024 | 0.7 | 10 |
| Q3 2024 | 1.0 | 13 |
Market Capitalization
As of September 30, 2024, O-I Glass, Inc. had a market capitalization of approximately $3.1 billion, reflecting fluctuations in stock price and overall market conditions.
Stock Performance
O-I Glass's stock performance has been characterized by volatility influenced by market trends and company-specific developments. The following table summarizes the stock performance metrics for 2024:
| Metric | Value |
|---|---|
| Stock Price (as of Sept 30, 2024) | $20.00 |
| 52-Week High | $25.00 |
| 52-Week Low | $15.00 |
| Year-to-Date Return | -12% |
O-I Glass, Inc. (OI) Mission Statement
Mission Statement Overview
The mission statement of O-I Glass, Inc. as of 2024 emphasizes the company's commitment to sustainability, innovation, and customer satisfaction. The company aims to be a leader in glass manufacturing, providing high-quality glass products that are environmentally friendly and socially responsible.
Financial Performance Metrics
In the first nine months of 2024, O-I Glass reported net sales of $5,002 million, a decrease from $5,464 million in the same period of 2023, reflecting a decline of $462 million or 9%. The decrease was attributed to lower average selling prices and a decline in glass container shipments by approximately 5%.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Sales | $5,002 million | $5,464 million | -9% |
| Segment Operating Profit | $612 million | $1,025 million | -40% |
| Net Earnings Attributable to Company | $48 million ($0.31/share) | $367 million ($2.31/share) | -87% |
| Earnings Before Income Taxes | $163 million | $506 million | -68% |
| Effective Tax Rate | 62.6% | 25.1% | +149% |
Segment Performance Analysis
O-I Glass operates primarily in two regions: the Americas and Europe. In the Americas, net sales for the first nine months of 2024 were $2,693 million, down from $2,943 million in 2023, reflecting a 9% decrease. In Europe, net sales for the same period were $2,216 million, a decrease from $2,428 million, also representing a 9% decline.
| Region | 2024 Net Sales | 2023 Net Sales | Change (%) |
|---|---|---|---|
| Americas | $2,693 million | $2,943 million | -9% |
| Europe | $2,216 million | $2,428 million | -9% |
Operational Challenges and Strategic Initiatives
O-I Glass has faced operational challenges, including a significant temporary curtailment of approximately 18% of production capacity in response to sluggish demand. This has resulted in increased operating costs and lower segment operating profits.
The company has initiated several strategic initiatives aimed at improving profitability. The "Fit to Win" program targets an increase in adjusted EBITDA to at least $1.45 billion by 2027. As part of this initiative, O-I Glass plans to close approximately 4% of its production capacity and has already begun production at its first MAGMA greenfield plant in Kentucky in 2024.
Future Outlook
For the full year 2024, O-I Glass anticipates flat sales demand compared to 2023, with sales volume expected to decline by a low-to-mid single digit percentage. The company expects cash provided by operating activities to range between $380 million and $420 million, with capital expenditures projected at approximately $550 million.
How O-I Glass, Inc. (OI) Works
Company Overview
O-I Glass, Inc. (OI) is a leading manufacturer of glass containers, primarily serving the beverage, food, and pharmaceutical markets. The company operates globally, focusing on sustainable production processes and innovative glass solutions.
Financial Performance
As of the third quarter of 2024, O-I Glass reported significant changes in its financial performance. The following table summarizes key financial metrics for the company:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $1,679 million | $1,743 million | $5,002 million | $5,464 million |
| Net Earnings (Loss) | $(80) million | $51 million | $48 million | $367 million |
| Earnings Before Income Taxes | $(57) million | $82 million | $163 million | $506 million |
| Segment Operating Profit | $144 million | $301 million | $612 million | $1,025 million |
| Effective Tax Rate | 33.3% | 31.7% | 62.6% | 25.1% |
Segment Performance
O-I Glass operates primarily in two regions: the Americas and Europe. The performance of each segment for the first nine months of 2024 is detailed below:
| Region | Net Sales (9M 2024) | Net Sales (9M 2023) | Operating Profit (9M 2024) | Operating Profit (9M 2023) |
|---|---|---|---|---|
| Americas | $2,693 million | $2,943 million | $296 million | $419 million |
| Europe | $2,216 million | $2,428 million | $316 million | $606 million |
Production and Operations
In response to fluctuating demand, O-I Glass has implemented temporary production curtailments, reducing production capacity by approximately 18%. The company has also announced the permanent closure of five furnaces to align production with current market conditions. These actions are part of the company’s broader strategy to optimize its operations and improve profitability.
Debt and Interest Expense
As of September 30, 2024, O-I Glass had total long-term debt of $5,068 million. The company reported a net interest expense of $87 million in the third quarter of 2024, an increase from $78 million in the same quarter of 2023. The increase in interest expense is attributed to rising interest rates affecting the company's borrowing costs.
Cash Flow and Capital Expenditures
O-I Glass expects cash provided by operating activities to range between approximately $380 million and $420 million for 2024, with capital expenditures projected at around $550 million. These investments are aimed at enhancing production capabilities and supporting the company's strategic initiatives.
Market Challenges and Strategic Initiatives
The company has faced challenges due to destocking across the value chain, impacting sales volumes. To counteract these challenges, O-I Glass has initiated the "Fit to Win" program, aiming to enhance operational efficiency and increase adjusted EBITDA to at least $1.45 billion by 2027. This program includes restructuring actions and optimizing the production network.
Sustainability Efforts
O-I Glass is focused on sustainability, with initiatives to reduce its environmental footprint through the use of recycled materials and energy-efficient production processes. The company began production at its first MAGMA greenfield plant in Kentucky in Q3 2024, which is expected to contribute positively to its sustainability goals.
How O-I Glass, Inc. (OI) Makes Money
Revenue Generation
O-I Glass, Inc. generates revenue primarily through the production and sale of glass containers for various industries, including alcoholic beverages, food, and non-alcoholic beverages. In the first nine months of 2024, the company reported net sales of $5,002 million, a decrease of 9% compared to $5,464 million in the same period of 2023.
| Segment | Net Sales 2024 (in millions) | Net Sales 2023 (in millions) | Change (%) |
|---|---|---|---|
| Americas | $2,693 | $2,943 | -9% |
| Europe | $2,216 | $2,428 | -9% |
| Total | $5,002 | $5,464 | -9% |
Product Mix
Revenue is categorized by customer end use, with significant contributions from the following segments:
| End Use | Americas (2024, in millions) | Europe (2024, in millions) | Total (2024, in millions) |
|---|---|---|---|
| Alcoholic Beverages | $1,492 | $1,618 | $3,110 |
| Food and Other | $660 | $363 | $1,023 |
| Non-Alcoholic Beverages | $541 | $235 | $776 |
| Total | $2,693 | $2,216 | $4,909 |
Operating Profit
The company reported a segment operating profit of $612 million for the first nine months of 2024, down from $1,025 million in the same period of 2023, reflecting a decrease of 40%.
| Segment | Operating Profit 2024 (in millions) | Operating Profit 2023 (in millions) | Change (%) |
|---|---|---|---|
| Americas | $296 | $419 | -29% |
| Europe | $316 | $606 | -48% |
| Total | $612 | $1,025 | -40% |
Cost Structure and Operating Expenses
In the first nine months of 2024, O-I Glass faced higher operating costs primarily due to:
- Temporary production curtailments to balance supply with demand.
- Higher costs associated with lower production volumes.
- Increased legacy environmental charges.
Operating costs increased by approximately $221 million compared to the same period in 2023, driven by lower production volumes and higher cost inflation.
Net Earnings
For the first nine months of 2024, the company recorded net earnings attributable to O-I Glass of $48 million, or $0.31 per share (diluted), compared to $367 million, or $2.31 per share (diluted) in 2023.
Interest Expense
Net interest expense for the first nine months of 2024 was $252 million, down from $263 million in the same period of the previous year, reflecting lower note repurchase premiums and write-offs of deferred finance fees.
Future Outlook and Strategic Initiatives
O-I Glass is implementing a series of initiatives to enhance profitability, including:
- Continuing production pauses to align supply with demand.
- Evaluating the closure of approximately 4% of production capacity.
- Targeting adjusted EBITDA of at least $1.45 billion by 2027.
For 2024, the company expects cash provided by operating activities to range between $380 million and $420 million, with capital expenditures estimated at $550 million.
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Article updated on 8 Nov 2024
Resources:
- O-I Glass, Inc. (OI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of O-I Glass, Inc. (OI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View O-I Glass, Inc. (OI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.